Why Zomato’s letter may make shareholders smile

Yatti Soni Bengaluru | Updated on August 12, 2021

CEO and CFO pen a conversational note on hits and misses to the stock market

From ‘delivering billion smiles’ to ‘we love bad news’ — Zomato’s quarterly results has brought the start-up’s conversational style to the stock market, too.

The conversation around Zomato’s IPO has always been laden with interesting takes by the company.

Style of communication

Naturally, Zomato’s letter to shareholders, too, followed the same frank and conversational style of communication.

CEO Deepinder Goyal and CFO Akshant Goyal opened up to the shareholders about both good and bad news.

Starting with the good news, they said Zomato hit the ‘billion order’ milestone last week. In the same breath, the executives wrote: “We love bad news at Zomato. Call us weird, but we get more excited than disappointed when we hear bad news,” the letter read.

Talking about the ease with which Zomato explained to its shareholders its long term vision and a greater focus on growth, Ritesh Malik, founder of Innov8 and angel investor, said, “Start-ups have always been transparent and upfront about their failures and successes compared to traditional companies which may sometimes try to hide their failures from investors.”

India has not seen fast-growing loss-making companies on the stock market and so, how these companies report their quarterly reports is itself an experience.

Adding to this, Abhishek Rungta, Founder & CEO of Indus Net Technologies and an angel investor, said, “A good percentage of Zomato’s retail investors are young people. So, I think, they have kept the level of clarity that the young generation expects.” The language of the letter is also very characteristic of how start-ups are, in general; more conversational, open and frank, he pointed out.

Zomato posts Q1 loss of ₹356 cr

Friendly tone

Zomato has always taken a friendly tone in its communications. On Day 1 of its IPO, Zomato’s social media update read, “Mereko to aisa dhak dhak horela hai” (I am feeling nervous), taking a line from a popular Bollywood movie Phir Hera Pheri. Being a consumer tech company, Zomato has kept its content relatable for its users and even started nationwide trends through its impactful statements.

Sairee Chahal, Founder-CEO of SHEROES, also referred to this differentiating quality of new-age brands like Zomato and said, “Nowadays, companies are not far removed from the customers, people are using these apps on their phones, they follow them on social media, and even founders have become a core part of the brand. I think in some ways this is also demonstrating a high level of accountability, which essentially differentiates new-age companies from everybody else.”

Zomato closes Day 1 of listing with 65 per cent gains

Published on August 11, 2021

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